Credit Rating Analyst

Credit Rating Analyst Interview Questions and Answers

Updated 27 Oct 2023

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Q1. How to do stock audit?

Ans.

Stock audit involves verifying and validating the physical existence and accuracy of stock holdings.

Conduct a physical count of stock items to ensure they match the recorded quantities.
Compare the physical count with the stock records to identify any discrepancies.
Inspect the condition and quality of the stock items.
Review the stock valuation methods and ensure they are applied correctly.
Check for proper documentation and record-keeping of stock transactions.
Perform random sa...read more

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Current ratio is a financial metric that measures a company's ability to pay its short-term liabilities with its short-term assets.

Current ratio is calculated by dividing a company's current assets by its current liabilities.
A higher current ratio indicates a better ability to cover short-term obligations.
For example, if a company has $100,000 in current assets and $50,000 in current liabilities, its current ratio would be 2:1.
A current ratio of less than 1 suggests that a co...read more

Ans.

CA stands for Credit Analyst and FA stands for Financial Analyst.

CA refers to a professional who assesses the creditworthiness of individuals or companies.
They analyze financial statements, credit reports, and other relevant data to determine the risk involved in lending money or extending credit.
FA refers to a professional who analyzes financial information to provide insights and recommendations for investment decisions.
They evaluate financial statements, market trends, and...read more

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The CR and CFO have a close relationship as the CFO plays a crucial role in managing the company's financials, which affects its credit rating.

The CFO is responsible for financial reporting and ensuring compliance with accounting standards, which impacts the company's creditworthiness.
The CFO also manages the company's cash flow and liquidity, which are important factors in determining its credit rating.
The CR and CFO work together to ensure that the company's financial state...read more

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Ans.

Balance sheet format includes assets, liabilities, and equity sections.

Balance sheet is divided into three main sections: assets, liabilities, and equity.
Assets are listed in order of liquidity, with current assets listed first.
Liabilities are listed in order of maturity, with current liabilities listed first.
Equity includes common stock, retained earnings, and other comprehensive income.
Total assets must equal total liabilities and equity.
Example: Assets - Cash, Accounts Rec...read more